Court Rules on Zoning Moratorium

Case involved asphalt plant that met all existing zoning requirements

A case recently decided by the N.C. Court of Appeals — and almost certainly to be heard by the N.C. Supreme Court — will greatly influence how localities can use zoning regulations to keep businesses from locating in a particular jurisdiction, even if zoning codes allow the business when it submits a site plan for review.

On Jan. 21, 2003, Douglas Robins applied to build an asphalt plant on land he was buying for the purpose in Hillsborough. The parcel was zoned as “general industrial”, with Hillsborough’s zoning regulations then allowing asphalt plants subject to a site plan review. The town’s Board of Adjustment conducted three public hearings on the site plan, but did not act. A fourth public hearing was scheduled for April 30, 2003.

That hearing, and a decision on Robin’s site plan, never happened. On April 22, eight days before the fourth public hearing, Hillsborough‘s Town Board issued a moratorium suspending “the Review, Consideration and Issuance of Permits and Applications for Manufacturing and Processing Operations Involving Petroleum Products,” including asphalt plants. The April 30 public hearing was canceled. In November 2003, Hillsborough amended its zoning ordinances to ban from the town asphalt plants and other facilities involved in manufacturing or processing petroleum products.

Robins challenged Hillsborough’s actions before the courts, first unsuccessfully in Superior Court and then before the N.C. Court of Appeals.

“Plaintiff [Robins] argues the trial court erred in granting summary judgment in favor of defendant because plaintiff is entitled to rely upon the language of the zoning ordinance in effect at the time he applied for the permit,” wrote Judge Tyson for a majority of a three-judge panel of the appeals court.

“We agree.”

“Under our Supreme Court’s decision in Northwestern Financial Group and this Court’s decisions in Lambeth and Woodlief, plaintiff ‘was entitled to rely upon the language of the ordinance in effect at the time he applied for the permit’… ‘To hold otherwise would allow compliance with regulations and permitting to become a moving target to ever changing revisions or amendments.’”

The majority was also concerned about the constitutionality of the town’s decision to ban asphalt plants. Under the Constitution, zoning decisions may not be “arbitrary and unduly discriminatory interference with the rights of property owners.”

“Courts in other jurisdictions require a municipality to demonstrate a much greater substantial relationship between the ordinance and the public welfare where a total prohibition of a lawful activity is involved rather than an ordinance which merely confines a use to a particular district,” Tyson wrote.

Citing with approval Michigan and Pennsylvania supreme court decisions, the Court of Appeal’s majority held that Robins was entitled to a hearing to determine Hillsborough’s complete ban was on petroleum product processing and manufacturing facilities was justified.

Judge Barbara Jackson dissented from the majority’s holdings. She noted that under North Carolina case law, citizens have no general vested right to have zoning ordinances remain forever the same. And she found that the exceptions under which created vested rights did not apply to Robins, exactly because Hillsborough had not acted on his proposed site plan or issued a building permit when it enacted its moratorium and later ban. She also found the cases cited by the majority as distinguishable from the current case.

Jackson was also unimpressed by Robins’ constitutional claims.

“Assuming arguendo< that plaintiff had a vested right in approval of his application, the evidence does not support a finding that defendant acted arbitrarily and capriciously in failing to make a decision on plaintiff’s application,” she wrote.

“A municipal board of adjustment ‘has a duty to safeguard the health and safety of the entire community’… It undoubtedly would be a breach of this duty to approve plaintiff‘s application when there was evidence to support either approval or disapproval of the application and all evidence had yet to be received. Accordingly, I believe that defendant could not have approved plaintiff’s application based on the evidence presented prior to the adoption of the moratorium without breaching its duty to the community. Therefore, the failure to render a decision on the application was neither arbitrary nor capricious.”

Because of Jackson’s dissent, the N.C. Supreme Court must hear the case if Hillsborough appeals the Court of Appeal’s decision.